Apple CEO Tim Cook is under pressure to revamp the company's product line-up amid concerns it has lost its knack for market-leading innovation. Photo: AFP

Apple stock is trading at $US504.59, down 8.3 per cent in morning trading. The company reported first-quarter earnings on Monday, raking in $US13.1 billion in net profit off $US57.6 billion in revenue.

Apple’s first quarter falls during the crucial holiday season, and sales of its mobile devices continued to top internal records. The company says it sold 51 million iPhones and 26 million iPads.

However, Apple’s second quarter forecast of $US42-$US44 billion in revenue fell short of Wall Street expectations of $US46 billion.

Apple is facing increased competition in the mobile market, most notably from Google’s Android operating system, which powers the majority of available smartphones, and hardware maker Samsung. The electronics giant is expected to unveil its next Galaxy S smartphone next month.

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Activist investor Carl Icahn said Tuesday that he bought more Apple shares after disappointing quarterly results from the technology giant.

“Just bought $500 mln more $AAPL shares. My buying seems to be going neck-and-neck with Apple’s buyback program, but hope they win that race,” Icahn wrote on Twitter Tuesday morning.

Stagnating growth is adding pressure for the company to release new hit products, be it a television, wearable computer or a way to pay for things with an iPhone.

The sales results and outlook indicate that demand may be ebbing for Apple’s devices, which were once reliable growth engines, as competitors flood in with their own smartphones and tablets. CEO Tim Cook said sales in North America were weaker than the company expected, partly because the less-expensive iPhone 5c released last year wasn’t as popular as the higher-end iPhone 5s.

“What we have gotten over the last year or so is impressive products, but they are really enhancements of current products and not necessarily the next new thing,” said Jack Ablin, chief investment officer with BMO Private Bank. “Apple investors want the next new thing - that’s the catalyst that people are waiting for.”